Those are some of the findings in a report by the Utility Regulator, the Belfast-based watchdog which is meant to make sure water, gas, and electricity networks are being run properly.
The body which runs Northern Ireland’s electrical grid is called SONI (short for System Operator NI).
SONI plans and manages the day-to-day business of the network, making sure there’s enough power and that it is getting to the right places.
However since 2009 SONI has been owed by EirGrid Plc – a state-run company headquartered in Dublin.
The regulator decided to look into how SONI was being governed, and has now pointed out a number of issues.
Its report, released today, states that “whilst there is a SONI board, its ability to influence and challenge decisions impacting NI electricity consumers is limited”.
The evidence inspectors found “suggests limited independence from EirGrid Plc”, and notes that EirGrid operates under a “cohesive all-island management structure”.
It adds: “There are no independent members on the SONI board.
“At the time of writing, all SONI board members are either members of the EirGrid executive team or members of the EirGrid Board (including the acting SONI MD)...
“[With] management and staff reporting into EirGrid Plc, and with a centralisation of more senior roles to EirGrid’s head offices, there is a significant risk of the formation of a culture that suppresses any challenge to policies, projects and budgets for NI specific reasons.”
It further hammers home this message by stating: “We conclude that the management and oversight of SONI Transmission System Operator licence responsibilities are effectively discharged by EirGrid Plc, and not by SONI Ltd.
“In addition, the integrated governance structures of the EirGrid group are not designed to enable SONI to act as an equal partner, nor even to be perceived as an equal partner with its own guiding mind.”
Among the potential problems which the report indicates is that the way SONI is currently run “could potentially give rise to inappropriately higher prices for NI consumers”.
This could happen as a result of a variety of factors.
For instance, the report notes that having just one procurement system can cut costs (by facilitating bulk purchases of hardware, for example), but during the course of its review some people had indicated to the regulator that “costs have gone up since procurement was centralised in EirGrid’s head offices”.
The report adds that this could happen because “items acquired for the all-island system may be over-specified for NI, or may require adaptation to be used in NI; in each case, the additional costs imposed on NI consumers may exceed the benefits of common procurement”.
The report concludes by suggesting reforms to the way SONI is governed, including the potential for a fully-independent board.
The BBC quoted a SONI spokeswoman as saying: “We note the consultation from the Utility Regulator published today relating to the ongoing review of SONI governance, we recognise the importance of this review and agree with the open nature of the consultation process.
“We will continue to engage constructively with the Utility Regulator, however, as the consultation is ongoing, it would be inappropriate for us to make any further comment.”
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